A tiny house investor racked up $20,000 in credit card debt to set up a property. Now the 384-square-foot home brings in up to $1,500 a month.

Business Insider

7 days ago

When Manny Reyna purchased his first tiny house, he admits he was underprepared.
"I didn't know what I was doing," the financially independent real estate investor told Business Insider.
As an Army vet, Reyna leveraged a 0% down VA loan to buy his first home in San Antonio in 2021. At the time, he had about $12,000 to his name, nearly all of which went toward closing costs. A year later, he used a VA loan again to buy a second single-family home. He moved in with his family, rented the first to a long-term tenant, and started bringing in passive rental income.
When the opportunity to add a fully furnished, 384-square-foot tiny home to his portfolio arose months later, he jumped, figuring he could generate quality returns by listing it on Airbnb. And that's essentially what happened: Reyna and the seller, who had built the tiny home on his own land, agreed on seller financing for the $50,000 property. Plus, the seller agreed to lease his land to Reyna, saving him the headache of finding, buying, and preparing another plot of land.
"I started renting it out on Airbnb immediately, and it took off," said Reyna.
But as foot traffic on the property increased, the landowner wanted more privacy and gave Reyna six months to move the tiny home.
Buying 1.6 acres of land for $65,000
Reyna's first obstacle was figuring out where to put the tiny home. He had two main criteria for the land: It had to be within a 30-minute drive from his home and a place where people were already visiting.
"I didn't want to have to buy land in the middle of nowhere, stick tiny homes there, and then have to create some sort of buzz to get people out there," he said.
A software tool called AirDNA that helps investors find top short-term rental markets helped narrow his search, and he eventually settled on an area near Medina Lake. As for the criteria for the land, "the biggest things that I wanted were no HOA and no deed restrictions. I didn't want to have to spend a bunch of money getting permits and cutting through all this red tape."
His real estate agent, who had connected him with the tiny home builder, helped him land a deal on a piece of land that met his criteria.
"In Texas, at that time, land was going for close to $80,000 an acre," said Reyna, who found a motivated seller and paid $65,000 for his 1.6 acres. "I got lucky. The lady that I bought the land from had inherited it, and she didn't want it at all. She took the first offer that I gave her."
He secured the land without much upfront cash by using a VLB loan, a program that allows veterans in Texas to buy land with competitive interest rates and low down payments.
"I had never bought land before. It's a whole other process," said Reyna, noting that it took four months to close. "When you buy the land, you need to get a surveyor, which is like an engineer who looks at the parameters of the land, maps it all out for you, and gives you a certificate saying, this is what your land looks like."
The surveyor was the first of many professionals Reyna would hire to prepare the land for the tiny home properly.
Racking up $20,000 in credit card debt to complete the project
Reyna's next hires included a land-clearing company to prepare the land and a moving company to transport the tiny home.
The movers "dropped it on some cement blocks," he said. "It's not on wheels or anything — it sits on cement blocks — and I'm not going to lie, it didn't look very nice aesthetically at first. So, I had to go build a deck."
Additionally, he added an eight-foot privacy fence around the home that cost about $4,800.
His land came with a water meter, which saved him from drilling a well, but that was about it. His largest expense was installing a septic system, a complex process that cost him about $15,000: "It required a permit because it's considered a plumbing system, so I had to talk to specialists. They charged me to design it and install it."
Installing electricity cost him another $3,400 — about $1,900 for the pole setup, plus another $1,500 for trenching and wiring — and required independent research.
"The electrician asked, 'What volts do you want?' And I was like, 'I have no idea,'" said Reyna. "There's so much that goes into this."
He funded the tiny home relocation and build-out project with rental income from his single-family home and savings from his full-time project management job. He also used two credit cards with $20,000 limits and long 0% interest periods: 15 and 21 months. He split his expenses between the two cards to maximize the promo periods.
As he racked up a roughly $20,000 balance between the two cards, "I questioned my life choices a lot of the time and wondered, 'What am I doing? Is this going to be completely botched?'" he admitted. "But I think that's part of it, right? Maybe if you don't question yourself or if you don't feel that way, maybe you're not doing things the right way or pushing the envelope enough."
After three long and expensive months developing the land, he reopened his first tiny home for business in July 2023. He threw all of his profit, plus savings from his W-2, toward his credit card debt in order to pay it off before incurring interest.
"Now, the only costs I really have are the cost of the land and the utilities," he said. The carrying cost of the land is about $400, and his monthly "mortgage" is a $290 payment that goes directly to the seller.
Bringing in up to $1,500 a month and adding a second tiny home to the land
Reyna initially listed the tiny home as a short-term rental just on Airbnb, but now uses a variety of platforms, including VRBO, Hipcamp, Facebook Marketplace, and Furnished Finder, and offers it as a mid-term rental.
"I try to do a shotgun approach to see who's going to bite first, rather than just solely relying on Airbnb," he said, though he prefers mid-term stays (more than 30 days but less than a year). He's found this strategy to be more lucrative than renting to long-term tenants and much easier to manage than short-term stays.
Once the first tiny home started profiting consistently — on average, he said it does between $1,200 and $1,500 a month in revenue — Reyna added a second tiny home to his land.
"The cool thing with the tiny homes is that they're so cheap to set up that the cash-on-cash return is pretty good once you can establish them at scale," said Reyna, who plans to add more properties to his lot. "If you can get more than one going, it's just pure profit, and it's not too much maintenance, either."
He's experimenting with other ways to "hack" his land, he said: "We've added two RV plug and play connections to the land, which we expect to bring in $900 to $1,000 a month, and we've listed a plot of the land to rent through Sniffspot, which we estimate revenue to be $200 to $300 a month."
Between his current rentals, he says he's on track to earn about $85,000 in 2025. BI verified his property ownership by looking at deeds and confirmed that he's bringing in rental income by viewing screenshots of his Airbnb dashboard and reviewing one of his mid-term rental lease contracts.
"The tiny houses are the ones that are making the most profit for me," said Reyna, who quit his job in early 2025 and moved to Tokyo with his family. He has a team in Texas that helps him manage the properties.
He classifies the tiny home project as a success, but if he could go back in time, he'd do things differently.
"I was trying to build the plane before flying it," he said. His top advice for prospective tiny home investors is to "look at everything from an all-encompassing view. Consider the cost of everything so that you're not figuring it out as you go, like I did. Also, try to find land with infrastructure already built — at the very least, a water meter, because it's so expensive to get a well. If you can help it, electricity, too."